Boeing machinists union says members should strike

CHICAGO (Reuters) - Boeing Co's (BA.N) largest labor union said on Friday it advised its members to reject the company's final contract proposal and go forward with a strike next week that could cost the plane maker $3 billion a month.

"This company is not listening. They know what they need to do to come our way to make this an acceptable contract," said Tom Wroblewski, president of Seattle's District 751 for the International Association of Machinists (IAM).

"Overwhelmingly, our members are opposed to this contract."

IAM members are due to vote on the contract on September 3, when the current three-year deal expires. Without a new pact, the union could vote for its 27,000 IAM-represented employees to strike as early as September 4.

The company can avert the job action by getting more than 34 percent of union members to ratify the offer, because a two- thirds majority of "no" votes is needed to start a strike. If there is no strike, the union would in effect accept Boeing's last offer.

Boeing said it was disappointed by the union's recommendation and encouraged union members to study the company's last offer and vote in their best interest.

"We hope our employees recognize the value of this offer. It is our best and final," said spokesman Tim Healy.

In this round of negotiations, Boeing has taken the unusual step of presenting its proposals on its Web site directly to the workers, a move that circumvents the IAM. Typically, the union would present the offers to its members.

The union said it filed an unfair labor practices complaint against the company claiming it tried to sway the negotiations by going straight to employees and media with every offer.

Wroblewski said it is still willing to negotiate with the company and that the group would welcome federal mediation.

Boeing shares closed down 78 cents at $65.56 on the New York Stock Exchange.

CONCESSIONS

Boeing said its offer would provide an average of $34,000 in additional wages and bonuses over three years to employees. The company said it is offering workers either 6 percent of gross pay over the final 12 months of the existing contract, or $2,500, whichever is greater.

It offered a $2,500 ratification bonus if a majority vote approves the contract on or before September 3.

Boeing withdrew proposals to discontinue medical coverage for early retirees hired after January 1, 2010, and to create a defined-contribution retirement plan for those hired after January 1, 2009. It also withdrew its proposal to negotiate a separate contract for workers in Wichita.

The union said Boeing's latest offer fell short in terms of job security in addition to shifting medical expenses back to employees and offering wages below industry standards.

Richard Aboulafia, aerospace analyst at the Teal Group, said Boeing's latest offer has not eased the union's concerns about job security and he put the chances of a strike at around 60 percent.

"Boeing and most manufacturing companies have shown zero willingness to compromise on that," said Aboulafia.

The IAM, which represents 27,000 Boeing employees, mostly in the Seattle area, has rejected two proposals. It has gone on strike against Boeing three times in the last 20 years.

(Reporting by Kyle Peterson, Patrick Fitzgibbons, Mark McSherry, Nick Zieminski, Scott Malone, Laura Myers and Daisuke Wakabayashi; Editing by Gunna Dickson and Andre Grenon)